Labour MP Chuka Umunna fears HMRC's handling of the Goldman Sachs deal will lead the public to believe that there is 'one rule for some companies and another for individual taxpayers's
He's right to think that.
Almost every accountant does too.
Because it's true.
And it's wrong.
Big companies are not above the law. But HMRC treats then as if they are.
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It’s not just big companies, though, is it?
The whole principle of the rule of law is that the law applies equally to those with power and those without – that the people doing the governing must follow the same laws as the people who get governed. It’s a fine principle, a necessary cornerstone of democracy – and yet in this country, it was never properly established, and has now almost completely collapsed.
For me, this is the big argument against a general anti-avoidance principle.
HMRC will use it to bash the little guy who won’t have the resources and stomach for the fight.
Big business, with the armies of advisors, deep pockets, patience, stomach for the fight etc will sit it out, knowing HMRC will bend over backwards to avoid litigation and will eventually settle. Vodaphone-type horse trading will become a routine and un-newsworthy.
From what I gather from friends who work in the field back in Oz (where they have had it for over 20 years) this is the experience and it is entirely consistent with your post. Not sure why things would turn out differently here.
Maybe not too relevant to this discussion, but along the lines of avoidance….just avoiding pension payments this time:
http://www.dailyfinance.co.uk/2011/05/13/loophole-risk-for-company-pensions/#continued
Chuka’s right of course. But one wonders whether he’d be quite as keen on this view were he in government or a Balls Mark 2.
“The law, in its majestic equality, forbids the rich and the poor alike to sleep under bridges, to beg in the streets, and to steal bread.”
Chuka Umunna’s right about credit rating agencies too: http://thoughcowardsflinch.com/2011/05/14/does-the-government-understand-anything-at-all-about-credit-rating/
And David Gauke is either a very weak fool, or a filthy crook.